PepsiCo Faces Rising Tariff Pressures on Irish Soft Drink Concentrates
PepsiCo is confronting a potential setback in its supply chain as new European Union tariffs emerge from a trade dispute over post-Brexit trade arrangements in Northern Ireland. The U.S.-based beverage giant, whose Mountain Dew concentrate is manufactured in Cork, Ireland, now faces a 50% tariff on these products when imported to the U.S.
The new tariffs stem from a 2021 disagreement over the Northern Ireland Protocol and are intended as retaliatory measures against U.S. subsidies for aircraft manufacturers. As a result, PepsiCo’s import of Irish-made soft drink concentrates is now subject to the same 50% tariff imposed on certain other Irish goods entering the U.S.
PepsiCo disclosed this development in regulatory filings, noting that the increased tariff applies to “certain non-carbonated soft drink beverage bases,” including some products under its non-carbonated drinks portfolio. The company did not specify whether its carbonated concentrate lines, like Pepsi or 7Up, are affected.
This development raises concerns about cost pressures at a time when global FMCG companies are already navigating inflationary headwinds, supply chain disruptions, and shifting consumer demand. PepsiCo’s reliance on Irish production for concentrate—particularly for Mountain Dew—may prompt a reassessment of its manufacturing footprint or sourcing strategies depending on the duration and impact of the tariffs.
It remains unclear whether these added costs will be passed along the value chain to retailers and, ultimately, consumers. However, any sustained increase in input or trade costs could affect product margins, especially in North America, PepsiCo’s largest revenue-generating market.
In the wider competitive context, rival Coca-Cola may see relative stability if its supply chain operations—especially for U.S.-bound concentrates—remain unaffected by these EU-U.S. trade tensions. This dynamic could influence pricing strategies and promotional campaigns in key beverage categories such as energy drinks and flavored water.
With regulatory negotiations and tariff reviews ongoing, industry leaders will be keeping a close eye on shifts in trade policy, particularly those with downstream implications for pricing, sourcing, and regional production strategies within the global beverage sector.